Market Overview

Market Wrap For May 1: Markets Mixed To Start The New Month

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U.S. stocks were little moved to start off the month of May as investors and traders are cautious before April's nonfarm payrolls report are released on Friday.

The consensus estimate for Friday's figure stands at 215,000 which would trump March's 192,000 number.

“This is a really important release," Steven Saywell of BNP Paribas told the Wall Street Journal. The first quarter was a disaster for growth in the US and yesterday's GDP figure only supported that. The real question now is whether this is a start of sustained weakness for the year or whether we will see strong acceleration in the second quarter."

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  • The Dow lost 0.13 percent, closing at 16,558.87.
  • The S&P 500 lost 0.01 percent, closing at 1,883.68.
  • The Nasdaq gained 0.31 percent, closing at 4,127.45.
  • Gold lost 0.85 percent, trading at $1,284.90.
  • Oil lost 0.31 percent, trading at $99.43 a barrel.
  • Silver lost 0.57 percent, trading at $19.07.

News of Note

April Challenger Job-Cut Report rose to 40,298 from 34,399 in March.

Initial Jobless Claims rose 14,000 to 344,000, above the 319,000 consensus and a previous reading of 330,000. Continuing claims rose 97,000 to 2.771 million, above the consensus of 2.708 million.

March Personal Income rose 0.5 percent month over month, ahead of expectations of a 0.4 percent gain.

March Personal Spending rose 0.9 percent month over month, ahead of expectations of 0.6 percent and a prior reading of 0.3 percent.

U.S. April PMI Manufacturing fell to 55.4 from 55.5 in March and missed the consensus of 55.8.

April ISM Manufacturing Index rose to 54.9 from 53.7 in March, ahead of expectations of 54.3.

March Construction Spending rose 0.2 percent, below expectations of 0.6 percent gain.

EIA Natural Gas Inventory rose 82 bcf, ahead of the consensus of a gain of 75 bcf.

China's manufacturing PMI rose to 50.4 in April from 50.3 in March but missed the consensus of 50.5.

United Kingdom's manufacturing PMI rose to 57.3 in April from 55.8 in March and topped the consensus of 55.4.

Analyst Upgrades and Downgrades of Note

Analysts at CRT Capital maintained a Buy rating on Actavis (NYSE: ACT) with a price target raised to $245 from a previous $230. Shares gained 1.71 percent, closing at $207.83.

Analysts at UBS upgraded Barclays (NYSE: BCS) to Buy from Neutral. Shares gained 1.49 percent, closing at $17.36.

Analysts at Morgan Stanley downgraded Coach (NYSE: COH) to Underweight from Equal-weight with a $36 price target. Shares lost 1.46 percent, closing at $44.00.

Analysts at Deutsche Bank maintained a Buy rating on Energizer Holding (NYSE: ENR) with a price target raised to $128 from a previous $120. Shares gained 2.03 percent, closing at $113.96.

Analysts at Citigroup maintained a Buy rating on Express Scripts (NASDAQ: ESRX) with a price target lowered to $84 from a previous $92. Shares lost 0.62 percent, closing at $66.17.

Analysts at Deutsche Bank maintained a Buy rating on Hyatt Hotels (NYSE: H) with a price target raised to $62 from a previous $59. Shares hit new 52-week highs of $58.06 before closing the day at $57.84, up 2.77 percent.

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Sirius XM Holdings (NASDAQ: SIRI) will sell $750 million of senior notes due 2024 to institutional buyers. Shares gained 0.70 percent, closing at $3.22.

Analysts at Keefe Bruyette & Woods assumed coverage of MetLife (NYSE: MET) with an Outperform rating. Shares lost 1.49 percent, closing at $51.57.

Analysts at Deutsche Bank maintained a Hold rating on Panera Bread (NASDAQ: PNRA) with a price target lowered to $165 from a previous $175. Meanwhile, analysts at Susquehanna upgraded Panera to Positive from Neutral with a price target lowered to $184 from a previous $188. Shares gained 2.59 percent, closing at $156.93.

Analysts at Citigroup maintained a Buy rating on The Carlyle Group (NYSE: CG) with a price target lowered to $37 from a previous $38. Shares gained 1.62 percent, closing at $32.60.

Analysts at Piper Jaffray upgraded Yelp (NASDAQ: YELP) to Overweight from Neutral with an $80 price target. Meanwhile, analysts at Credit Suisse maintained an Outperform rating on Yelp with a price target raised to $90 from a previous $87 and analysts at Citigroup maintained a Buy rating on Yelp with a price target lowered to $74 from a previous $76. Shares gained 9.77 percent, closing at $64.02.

Analysts at Maxim Group maintained a Sell rating on Youku Tudou (NASDAQ: YOKU) with a price target lowered to $18 from a previous $24. Shares gained 0.04 percent, closing at $22.30.

Equities-Specific News of Note

According to Bloomberg, Pfizer (NYSE: PFE) is preparing to bid up to 63 billion pounds ($106 billion) to acquire AstraZeneca. (NYSE: AZN) Shares of Pfizer lost 0.42 percent, closing at $31.15 while shares of AstraZeneca hit new 52-week highs of $82.68 before closing the day at $81.06, up 2.54 percent.

General Motors' (NYSE: GM) unit sales rose 6.9 percent to 254,076, topping estimates for a 5.7 percent gain. Shares gained 1.22 percent, closing at $34.90.

Ford (NYSE: F) officially named Mark Fields as its new Chief Executive Officer in a press conference this morning. Alan Mulally will end his career as head of Ford on July 1. Meanwhile, Ford unit sales fell 0.7 percent to 211,126, missing estimates for a 3.0 percent gain. Shares lost 1.49 percent, closing at $15.91.

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Whitney Tilson presented SodaStream (NASDAQ: SODA) as a long idea at the Value Investing Congress. Shares lost 1.20 percent, closing at $42.02.

Abercrombie & Fitch (NYSE: ANF) has nominated four independent directors as part of an agreement with activist investor Engaged Capital. Shares gained 2.94 percent, closing at $37.85.

SolarCity (NASDAQ: SCTY) expanded into Nevada and plans to begin offering its solar installion and electricity sale service. Shares gained 2.54 percent, closing at $54.60.

TripAdvisor (NASDAQ: TRIP) has acquired Vacation Home Rentals, a site that advertises thousands of rental properties worldwide for an undisclosed sum. Shares gained 3.42 percent, closing at $83.50.

Yum Brands (NYSE: YUM) announced that Greg Creed, the current chief of Taco Bell will step up to become the CEO of Yum Brands as its current CEO David Novak will retail from top ranks and assume the position of chairman of the company. Shares lost 0.96 percent, closing at $76.25.

The FAA will classify Boeing's (NYSE: BA) new 777x jet as an “incremental upgrade” instead of a new plane which will result in a cheaper and simpler re-certification. Shares lost 0.43 percent, closing at $128.46.

Qualcomm (NASDAQ: QCOM) will spin-off its location-awareness business into a company named Gimbal and will sell a majority holding to a group of investors. Shares gained 0.36 percent, closing at $78.99.

AT&T (NYSE: T) is reportedly interested in buying DirecTV (NYSE: DTV) in a deal with a price tag of at least $40 billion. A newly created entity would boast nearly 26 million pay TV subscribers but such a deal would be subject to heavy scrutiny by the regulators. Shares of AT&T lost 0.34 percent, closing at $35.58 while shares of DirecTV hit new 52-week highs of $84.20 before closing the day at $80.76, up 4.07 percent.

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Anheuser-Busch InBev (NYSE: BUD) announced it has reached a deal with the Teamsters union and the beverage maker will add $2 billion in wages and benefits over five years. Shares gained 0.82 percent, closing at $106.69.

Winners of Note

This morning, T-Mobile (NASDAQ: TMUS) reported its first quarter results. The company announced an EPS of -$0.19, missing the consensus estimate of -$0.10. Revenue of $6.88 billion missed the consensus estimate of $6.92 billion. Net loss for the quarter fell to $151 million from a net profit of $107 million in the same quarter a year ago as the company's unique and aggressive strategies continues to take its toll on short-term numbers. Investors focused on the fact that the carrier added 1.3 million postpaid subscribers, 465,000 pre-paid subscribers and 600,000 non-branded subscribers in the quarter. T-Mobile is expecting to add 2.8 million to 3.3 million postpaid net additions in 2014, up from previous guidance of two million to three million subscribers. It was also reported on Wednesday that Sprint intents to push forward a bid for the telecom company after securing appropriate financing from six banks. Shares gained 8.06 percent, closing at $31.65.

Merrimack Pharmaceuticals (NASDAQ: MACK) announced that its cancer drug MM-398 achieved its primary endpoint of a statistically significant improvement in overall survival in patient with pancreatic cancer in a Phase 3 clinical trial. Shares surged to new 52-week highs of $7.65 before closing the day at $6.99, up 59.23 percent.

Jive Software (NASDAQ: JIVE) has partnered with Cisco who will integrate Jive's enterprise social networking platform with its WebEx and Jabber tools. Cisco will also resell Jive's products directly and through its partner network. Shares of Jive gained 10.29 percent, closing at $8.25.

Decliners of Note

This morning, Cardinal Health (NYSE: CAH) reported its third quarter results. The company announced an EPS of $1.01, in-line with the consensus estimate. Revenue of $21.4 billion missed the consensus estimate of $21.720 billion. Earnings from continuing operations in the quarter fell to $315 million from $346 million in the same quarter a year ago which reflected the continuing impact of the previously announced contract expiration with Walgreens. Sales of the company's pharmaceutical segment fell 15 percent to $18.1 billion while medical segment sales rose seven percent to $508 million. The company reiterated prior guidance for full year 2014 EPS to be $3.75 to $3.85 versus a consensus estimate of $3.84. Shares lost 6.32 percent, closing at $65.12.

This morning, Ocwen Financial (NYSE: OCN) reported its first quarter results. The company announced an EPS of $0.54, missing the consensus estimate of $1.00. Revenue of $553 million missed the consensus estimate of $570.58 million. Net income for the quarter rose to $75.8 million from $45.1 million in the same quarter a year ago. The company announced that there was a $5.1 million loss on the $7.6 billion portion of the mortgage servicing rights portfolio marked at fair value as compared to a gain of $19.1 million a year ago. Reserves for noncollectable servicing receivables rose to $24.3 million in the quarter compared to a rise of 5.7 million a year ago. Finally, the company generated earnings of only $0.6 million in its lending segment compared to $14.8 million a year ago. Shares lost 7.44 percent, closing at $35.08.

Earnings of Note

This morning, Textron (NYSE: TXT) reported its first quarter results. The company announced an EPS of $0.31, missing the consensus estimate of $0.40. Revenue of $2.85 billion missed the consensus estimate of $3.02 billion. Net profit for the quarter fell to $85 million from $119 million in the same quarter a year ago as acquisition and restricting costs negatively impacted the company by $16 million. Sales of Bell fell to $873 million from $949 million while sales of Textron Systems fell to $363 million from $429 million. Textron issued guidance and expects its EPS from continuing operations to be in a range of $1.92 to $2.12. Shares lost 4.69 percent, closing at $38.98.

This morning, Teva Pharmaceutical (NASDAQ: TEVA) reported its first quarter results. The company announced an EPS of $1.22, beating the consensus estimate of $1.21. Revenue of $5.0 billion missed the consensus estimate of $5.11 billion. Net income for the quarter rose to $744 million from $6330 million in the same quarter a year ago as sales of generic medicines rose three percent year over year to $2.3 billion and the segment's profit rose 31 percent to $341 million. The company successfully launched Copaxone in the U.S. and is on track to achieve 30,000 patients by the end of May and 40,000 by the end of the year. Shares gained 4.32 percent, closing at $50.97.

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This morning, MasterCard (NYSE: MA) reported its first quarter results. The company announced an EPS of $0.73, beating the consensus estimate of $0.72. Revenue of $2.17 billion beat the consensus estimate of $2.14 billion. Net income for the quarter rose to $870 million from $766 million in the same quarter a year ago as the company saw a 14 percent increase in gross dollar volume to $1.0 trillion while the number of processed transactions rose 14 percent to 9.8 billion. The company's growth was partially offset by a rise of 12 percent in total operating expenses to $892 million. The company did warn that Russian President Vladimir Putin's plan to create its own card payment system would create complications for its operations in the region. Shares gained 0.91 percent, closing at $74.22.

This morning, Exxon Mobil (NYSE: XOM) reported its first quarter results. The company announced an EPS of $2.10, beating the consensus estimate of $1.88. Revenue of $106.77 billion missed the consensus estimate of $109.76 billion. Net income for the quarter fell to $9.10 billion from $9.50 billion in the same quarter a year ago as oil-equivalent production fell 5.6 percent. Refining and marketing earnings fell 47 percent to $813 million while earnings in the company's chemical segment fell 7.9 percent to $1.05 billion. Quarterly earnings from the company's upstream business rose more than ten percent to $7.8 billion as production averaged 4.151 million barrels of oil-equivalent per day which was down 5.6 percent year over year. Shares lost 0.98 percent, closing at $101.41.

After the market closed, LinkedIn (NYSE: LNKD) reported its first quarter results. The company announced an EPS of $0.38, beating the consensus estimate of $0.34. Revenue of $473.19 million beat the consensus estimate of $466.69 million. Shares were trading lower by 3.02 percent at $156.35 following the earnings release.

After the market closed, Wynn Resorts (NASDAQ: WYNN) reported its first quarter results. The company announced an EPS of $2.32, beating the consensus estimate of $2.06. Revenue of $1.58 billion beat the consensus estimate of $1.49 billion. Shares were trading higher by 1.63 percent at $210.00 following the earnings release.

Quote of the Day

"Despite its challenging start, it appears as we begin May that the U.S. economy is beginning to accelerate from the low levels of Q1. As a result, perhaps 2014 will be the year were one should not "Sell in May and go away." Nevertheless, it is important to keep in mind that by this Fall, we will have had negative real interest rates in the U.S. for a longer consecutive period than at any other time - even after the Great Depression. As tapering ends, most likely in October, and the discussion shifts to an impending first rate hike (probably around the time when unemployment is approaching six percent and inflation is ticking higher), we will have to buckle our seat belts for an inevitably more volatility environment." -Third Point's quarterly letter to investors.

Posted-In: abercrombie & fitch Actavis Alan MulallyEarnings News Econ #s After-Hours Center Movers Best of Benzinga

 

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